OECD ECONOMIC POLICY REFORMS GOING FOR GROWTH 2018

• EDITORIAL

• EXECUTIVE SUMMARY: ENGLISH AND RUSSIAN

• RUSSIA NOTE

G20 FINANCE MINISTERS & CENTRAL BANK GOVERNORS MEETING

19 MARCH 2018

BUENOS AIRES, ARGENTINA

ECONOMIC POLICY REFORMS: GOING FOR GROWTH 2018 │ 1

Editorial:

An opportunity that governments should not miss

Global growth is finally back to cruising speed. For the first time in many years, all the

major regions of the world are enjoying a widespread and largely synchronised upswing,

even if some economies have been in steady expansion for much longer than others.

Hopefully, the stagnation of living standards endured by a large share of the population in

many OECD economies is coming to an end. The more rapid decline in unemployment

seen in recent months is clearly an encouraging sign. However, the improvements in

labour markets have yet to translate into significant and broad-based wage gains.

Comprehensive structural reforms are needed to sustain stronger growth beyond the

cyclical upswing, create more and better paying jobs, improve opportunities and

strengthen inclusion.

Figure 1. Global growth is back to cruising speed

Real GDP, year-on-year growth

Note: Average of annual growth rates for 2003-07 and 2011-15. OECD Projections for 2018 and 2019.

Source: OECD, Interim Economic Outlook, March 2018.

Based on the review of actions taken on structural policy priorities presented in this

Going for Growth report, there is little sign of an imminent pick-up in the pace of

reforms. If anything, the review points to a further slowdown in 2017 from the already

modest pace observed in the previous two years. Notwithstanding, some countries have

managed to introduce significant reforms in the past year. In Japan, measures have been

taken to improve access to childcare services, helping women to stay in the labour force.

France has implemented a broad labour market reform, covering both employment

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protection legislation and collective wage bargaining. India has rolled out a goods and

services tax, while Argentina has just passed a comprehensive tax reform.

Figure 2. The pace of reforms is modest

Number of reform actions taken as a percentage of Going for Growth recommendations

Note: Fully coloured bars refer to the share of fully implemented reforms. For 2017, reforms in the process of

implementation are included to ensure comparability with previous two-year periods. For the two-year

periods, the responsiveness rate is annualized. Emerging economies include Chile, Mexico, Turkey,

Argentina, Brazil, China, Colombia, Costa Rica, Indonesia, India, Russia and South Africa. Advanced

economies include all non-emerging OECD member countries and Lithuania.

By and large, governments have continued to devote greater attention to employment and

social protection, including also through measures to improve healthcare services.

Examples include Greece and Italy, where significant measures have been taken to

strengthen social protection, as well as China, where access to healthcare for migrant

workers has been improved. The broader attention to employment and income support is

important for achieving greater inclusiveness and a more balanced distribution of income.

To a large extent, reform efforts are paying off: the employment rates of low-skilled and

youth – still low in some countries hardest hit by the crisis – are improving and already

roughly back to their pre-crisis levels on average across countries, while the labour-force

participation of women continues to rise.

However, significant reforms have remained too few and far between to boost

productivity and to reduce the reliance on macro-policy stimulus. The return of higher

global growth offers a window of opportunity to make renewed progress on structural

reforms, with higher chances that they bear fruit more rapidly. Individually and

collectively, decision makers need to find ways to overcome political resistance to

reforms that address well-known growth bottlenecks, and lay the groundwork for their

economies to make the most of the ongoing digital transformation. Higher and more

sustained growth would also help to reduce financial risks related to the high public and

private debt levels built up in a low interest rate environment.

While finally gathering momentum, business investment still remains weak in

comparison with past expansions. Furthermore, recent data shows that investment in

digital technologies, which is fundamental to boosting productivity, varies greatly across

countries and firms. The growing productivity gap between leading and lagging firms is

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ECONOMIC POLICY REFORMS: GOING FOR GROWTH 2018 │ 3

itself a source of growing wage inequality and productivity slowdown. OECD analysis

suggests that firms face various constraints affecting both their incentives and capabilities

to invest in such technologies.

Raising investment incentives requires measures to create a more competitive business

environment, notably by promoting the entry of firms through lower regulatory barriers to

start-ups and by reducing obstacles to foreign direct investment. Despite progress in these

areas – for example in the European Union with the recent Services Package -- entry in

business services in countries such as France, Germany and Spain is still hampered by

administrative and regulatory barriers. Meanwhile, more needs to been done to reduce

barriers to foreign investment where they remain relatively high, including Indonesia,

Mexico and Russia. And, trade protectionism can only harm investment by raising costs

and uncertainty, eroding the competitive environment and narrowing the scope for

successful firms to grow.

There is also scope in many countries for reforming insolvency regimes to facilitate the

orderly exit or restructuring of unsuccessful firms. This is important both to encourage

experimentation of new ideas and to free the resources needed for successful innovative

firms to expand. Chapter 3 of this Report presents new OECD indicators of insolvency

regimes across countries, laying out the main design features to achieve such objectives.

In countries such as Australia, Italy and South Africa, lowering barriers to corporate

restructuring in case of distress is a priority. Reforms are also needed to harmonise

insolvency procedures across member states in the European Union.

Taxation is another area where governments can act to raise private incentives to invest.

This includes reforms of tax systems to broaden the tax base through the elimination of

loopholes, not least those that mostly benefit individuals with high levels of income or

wealth, while making room for rate reductions, especially on more mobile sources such as

capital and labour income. Reforms along those lines have been implemented in countries

such as Argentina, Canada and Spain, while corporate tax rates have been reduced in the

United States. But reforms have yet to tackle a key distortion of tax systems, which is to

favour debt over equity financing. Not only does such a bias contribute to making growth

overly dependent on debt, but it also discriminates against innovative young firms.

More broadly, most countries have ample scope for reforms that can reconcile growth and

inclusiveness objectives, notably by relying more on tax revenues from immovable

property and inheritance. Internationally, in the effort to make corporate taxation fairer

and more transparent, progress is being made to limit tax avoidance by multinationals

through the so-called Base Erosion and Profit Shifting (BEPS) action plan elaborated

under the auspices of the G20 and the OECD and the rolling out of the automatic

exchange of information.

In countries such as India, Indonesia and Turkey, but also Italy and Greece, labour

informality remains a key challenge for boosting inclusive growth. Addressing this

requires reforms of burdensome product and labour regulations, along with reducing

labour tax wedges on low-paid workers where they remain high. Bringing more workers

in formal jobs will offer better prospects to improve skills and productivity while

providing them with better social protection. In China, further measures to provide more

equal access to public services while abolishing the household registration system, would

promote labour mobility, productivity and inclusion. The effectiveness of reforms in these

areas is best supported by the successful implementation of measures to reinforce the

fight against corruption - such as the steps taken in Mexico - and to strengthen the rule of

law.

ECONOMIC POLICY REFORMS: GOING FOR GROWTH 2018 │ 4

In both emerging and advanced economies, the shortage of skills, including managerial

and organisational talent, is one factor limiting the capabilities of many firms to adopt

digital technologies. A longer-term response is reforms of education and training systems

to ensure that workers acquire the cognitive and non-cognitive skills that the new digital

technologies and knowledge-based capital make increasingly necessary. This includes

measures to facilitate access to education for disadvantaged groups so as to reduce the

digital divide. In the shorter term, the response to the skills shortage consists in providing

workers with better opportunities for up-skilling and reducing the mismatch between the

skills provided by workers and those demanded by employers. Developing training and

life-long learning programmes that benefit those who need them most remains a

challenge shared by most countries.

Hence, in spite of stronger economic growth this is no time for complacency. Going for

Growth provides policy priorities and recommendations to unlock skills development and

innovation capacity, to promote business dynamism and the diffusion of knowledge, and

to help workers benefit from a fast-changing labour market. In the spirit of ensuring the

sustainability of the gains in incomes and wellbeing it also increasingly takes into account

environmental risks and bottlenecks (see Chapter 2). The current economic upswing

provides a window for the successful implementation of reforms that can best achieve the

objective of strong, inclusive and sustainable growth. The opportunity should not be

missed.

Álvaro Pereira

OECD Acting Chief Economist

ECONOMIC POLICY REFORMS: GOING FOR GROWTH 2018 │ 5

Executive Summary

At nearly 4 per cent projected for 2018, the annual GDP growth rate of the global

economy is close to the pace of growth preceding the great recession. This period of

strong and broadly-based global growth creates favourable conditions for the successful

implementation of structural reforms – necessary to turn the upswing into stronger and

sustainable long-term growth for all.

Amid these positive short-term developments, still underpinned by supportive fiscal and

monetary policy, medium and longer-term challenges remain for policy makers.

Productivity growth is still disappointing. Despite the long-awaited employment

recovery, wages have so far failed to follow, and many vulnerable groups are still

confronted with weak prospects in the labour market. Inequality is persistent and on a

longer-term trend rise within many countries – indicating that parts of society have not

benefited much from growth. On top of this, megatrends such as digitalisation,

environmental pressures and demographics, may carry risks for the sustainability of long-

term growth unless the policy challenges they raise are properly addressed.

Going for Growth provides policy makers with concrete reform recommendations in

areas which are identified as the top five country-specific priorities in order to tackle

medium-term challenges, revive productivity and employment growth, while ensuring a

broad sharing of the benefits. The priorities are identified building on OECD expertise on

structural policy reforms and inclusive growth. The areas covered are diverse, including

product and labour market regulation, education and training, tax and transfer systems, as

well as trade and investment rules, physical and legal infrastructure and innovation

policies. Policy recommendations across these areas are articulated so as to form a

coherent reform strategy, which is crucial to reap synergies, manage trade-offs and ensure

that the benefits are broadly shared over time. As such, the Going for Growth framework

has been instrumental in helping G20 countries make progress on their structural reform

agenda, including through monitoring their growth strategies to achieve sustained and

balanced growth.

This Interim report reviews progress on structural reforms with respect to priorities

identified in Going for Growth 2017.

Actions taken on policy priorities

In 2017, the pace of reforms has remained similar to the relatively slow pace

observed in the last two years and below the one observed in the direct aftermath

of the crisis.

Nevertheless, some bold actions have been taken – over one third of actions

implemented in 2017 can be viewed as “major steps”. Notable examples include

reforms to strengthen social protection in Greece and Italy, a long-overdue reform

of the labour market in France, significant measures in Japan to increase childcare

ECONOMIC POLICY REFORMS: GOING FOR GROWTH 2018 │ 6

capacity, a goods and services tax in India and a comprehensive tax reform in

Argentina, to be phased in over the next 5 years.

More generally, the intensity of reforms has varied across policy areas. Among

reforms to boost skills acquisition and innovative capacity, widespread actions

were taken to increase the size and efficiency of R&D support.

The bulk of actions taken to promote business dynamism and knowledge diffusion

have focused on strengthening physical and legal infrastructure as well as on

making product market regulation more competition-friendly.

Significant actions have been taken in the area of social benefits, which is

important for social cohesion. To further help workers to cope with potentially

rapid changes in jobs and tasks, more reforms are needed in complementary

areas, such as improving active labour market and housing market policies to

facilitate the job-market transition and mobility.

Special chapters – reviewing indicators to enrich the Going for Growth analysis

This report includes two special chapters that review indicators for extending the scope of

the Going for Growth framework: green growth indicators and OECD indicators of

insolvency regimes.

The links between green and growth: what the indicators reveal

The ability to sustain long-term improvements in GDP and well-being, as advocated in

Going for Growth, depends – among other things - on the ability to reduce negative

effects (such as pollution) associated with economic activity, minimise environment-

related risks and lower the reliance on (limited) natural capital resources. Hence, a more

systematic approach to environment-related challenges in Going for Growth is warranted.

At the same time, the links between the environment, environmental policies and

economic growth are complex. In that regard, Chapter 2 reviews the indicators available

and the recent progress made on the measurement of environmental outcomes and

policies. While no single broadly-accepted measure of environmental performance exists,

significant progress has been made in the measurement of green growth, notably as part

of the OECD Green Growth Indicators, paving the way for a more consistent treatment of

green growth in Going for Growth.

Facilitating orderly exit: insights from the new OECD insolvency regimes indicators

Poorly performing insolvency regimes can be linked to three inter-related sources of

labour productivity weakness: the survival of so-called “zombie” firms – that should

otherwise exit the market; capital miss-allocation, i.e. the trapping of resources in low

productivity uses; and stalling technological diffusion. Chapter 3 presents the newly

developed OECD indicators of insolvency regimes, which will allow the extension and

fine-tuning of reform recommendations on exit policies in Going for Growth. The

analysis reveals significant cross-country differences in the extent to which insolvency

regimes promote orderly exit of non-viable firms, indicating that some countries have

scope to improve resource allocation and productivity through reforms of bankruptcy

laws and procedures.

OECD Multilingual SummariesEconomic Policy Reforms 2018Going for Growth Interim ReportSummary in Russian

Читайте полную версию книги на: 10.1787/growth-2018-en

Реформы экономической политики 2018Промежуточный доклад Стремления к ростуРезюме на русском языке

По прогнозам, годовые темпы роста ВВП в 2018 г. составят 4 процента, что приближается котметке, которая предшествовала великой рецессии. Данный период интенсивногоширокомасштабного глобального роста создает благоприятные условия для успешной реализацииструктурных реформ, необходимых для преобразования экономического подъема в долгосрочный иустойчивый рост для всех.

На фоне таких положительных краткосрочных преобразований, все еще опирающихся навспомогательные меры налоговой и денежно‑кредитной политики, среднесрочные и долгосрочныевызовы, стоящие перед политиками, остаются нерешенными. Рост производительностипо‑прежнему разочаровывает. Несмотря на долгожданное восстановление занятости, того женельзя сказать о зарплатах, а перспективы на рынке труда остаются весьма ограниченными длямногих уязвимых категорий населения. Неравенство сохраняется, а, с точки зрения долгосрочнойоценки тренда, увеличивается во многих странах, что означает, что часть общества не получаетдостаточных выгод от роста. Кроме того, такие мегатренды, как переход на цифровой формат,экологическое давление и демография, могут быть сопряжены с рисками для устойчивостидолгосрочного роста, если не будут решены связанные с ними проблемы политики.

Стремление к росту предоставляет разработчикам политики конкретные рекомендации реформв пяти приоритетных для каждой страны областях для решения среднесрочных задач, приданиянового импульса производительности и роста занятости, обеспечивая, при этом, широкоераспределение выгод. Приоритеты определяются на основе опыта ОЭСР в области структурныхреформ политики и инклюзивного роста. Охватываются самые разные направления, включаярегулирование рынка товаров и труда, образование и обучение, системы налогообложения итрансфертов, а также правила торговли и инвестиций, физическую и правовую инфраструктуры иполитику в области инноваций. Рекомендации в отношении политики в этих областяхсформулированы таким образом, чтобы сформировать согласованную стратегию реформ, котораяимеет решающее значение для получения синергетического эффекта, управления компромиссамии обеспечения широкого распространения выгод с течением времени. Таким образом, рамкиСтремления к росту играют важную роль, помогая странам "большой двадцатки" продвигатьсявперед в реализации своих программ структурных реформ, в том числе путем мониторинга ихстратегий роста для обеспечения его устойчивости и сбалансированности.

В данном промежуточном докладе рассматривается прогресс в области структурных реформ вотношении приоритетов, определенных в Стремлении к росту 2017.

Действия, предпринятые по приоритетам политики• В 2017 г. темпы реформ были примерно такими же низкими, как и в последние два года, и

ниже тех, что наблюдались сразу после кризиса.

ECONOMIC POLICY REFORMS 2018 - ISBN 978-92-64-291973 © OECD 2018

• Тем не менее, были предприняты некоторые смелые действия ‑ более трети мероприятий,осуществленных в 2017 г., могут рассматриваться как “крупные шаги”. Среди ярких примеровможно привести реформы по укреплению социальной защиты в Греции и Италии, давноназревшую реформу рынка труда во Франции, значительные меры в Японии, направленныена расширение возможностей по уходу за детьми, и комплексную налоговую реформу вАргентине, которая будет приведена в действие в течение следующих 5 лет.

• В целом, интенсивность реформ была разной в разных областях политики. Среди реформ,направленных на содействие приобретению навыков и новаторскому потенциалу,фигурировали широкомасштабные меры по увеличению объемов и эффективностиподдержки НИОКР.

• Основная часть мер, направленных на развитие бизнес‑активности и содействиераспространению знаний, была сосредоточена на укреплении физической и правовойинфраструктуры, а также на обеспечении более благоприятного для конкуренциирегулирования рынка товаров.

• Существенные шаги были предприняты в области социальных пособий, что важно длясоциальной сплоченности. Для оказания дальнейшей помощи работникам поприспособлению к потенциальным быстрым изменениям в их труде и рабочих местах,необходимо продолжать реформы в дополнительных областях, таких каксовершенствование активной политики рынка труда и рынка жилья для облегчения переходас одной работы на другую и мобильности на рынке труда.

Специальные главы – обзор показателей для углубленияанализа Стремления к росту

В этот доклад включены две специальные главы, в которых рассматриваются следующиепоказатели для расширения охвата Стремления к росту: показатели зеленого роста и показателиОЭСР в отношении порядка исполнения обязательств при несостоятельности.

Связи между двумя сторонами зеленого роста: о чем говорят показатели

Способность поддерживать долгосрочные улучшения в ВВП и благосостоянии, как ирекомендуется в Стремлении к росту, зависит, среди прочего, от способности снижать негативныепоследствия (такие как загрязнение) экономической деятельности, сводить к минимуму связанные сокружающей средой риски и уменьшать зависимость от (ограниченных) природных ресурсов.Следовательно, более систематический подход к вызовам, связанным с окружающей средой,вполне оправдан в рамках Стремления к росту. В то же время между окружающей средой,экологической политикой и экономическим ростом существует сложная взаимосвязь. В этой связи вГлаве 2 рассматриваются имеющиеся показатели и достигнутый в последнее время прогресс вобласти измерения экологических результатов и оценки политики. Несмотря на отсутствие единойобщепринятой меры измерения экологических результатов, был достигнут существенный прогрессв измерении зеленого роста, в частности, в рамках Показателей зеленого роста ОЭСР, чтооткрывает путь к более последовательному анализу зеленого роста в Стремлении к росту.

Содействие упорядоченному выходу: анализ новых показателей ОЭСР, касающихся порядкаисполнения обязательств при несостоятельности

Плохое функционирование существующих порядков исполнения обязательств принесостоятельности может быть связано с тремя взаимоствязанными источниками слабойпроизводительности труда: выживание так называемых компаний‑“зомби”, которые в противномслучае должны были бы уйти с рынка, неправильное распределение капитала, т.е. удержаниересурсов в низкопроизводительных видах использования, и сдерживание технологическойдиффузии. В Главе 3 представлены недавно разработанные показатели ОЭСР о порядкеисполнения обязательств при несостоятельности, которые позволят расширить и уточнитьрекомендации реформ политики выхода в рамках Стремления к росту. Анализ показывает, чтомежду странами существуют весомые различия в степени, в которой порядок исполненияобязательств при несостоятельности способствует упорядоченному выходу нежизнеспособныхкомпаний, что указывает на то, что некоторым странам есть, над чем поработать для улучшенияраспределения ресурсов и повышения производительности путем реформирования законов ипроцедур банкротства.

ECONOMIC POLICY REFORMS 2018 - ISBN 978-92-64-291973 © OECD 2018

© OECDДанное резюме не является официальным переводом ОЭСР.Воспроизведение данного резюме разрешается при условии, что при этом будут указаны атрибутыавторского права ОЭСР и заглавие оригинала публикации.Многоязычные резюме - переведённые отрывки из публикаций ОЭСР, вышедших в оригиналена английском и французском языках.

Читайте полную версию на английском языке в библиотеке ОЭСР (OECDiLibrary)!© OECD (2018), Economic Policy Reforms 2018: Going for Growth Interim Report, OECD Publishing.doi: 10.1787/growth-2018-en

ECONOMIC POLICY REFORMS 2018 - ISBN 978-92-64-291973 © OECD 2018

ECONOMIC POLICY REFORMS: GOING FOR GROWTH 2018 │ 7

Russia

Going for Growth is the OECD flagship report analysing structural policy settings and

economic performance to provide policymakers with concrete reform recommendations

to boost growth and ensure that the gains are shared by all. The 2018 Interim Report

reviews the main growth challenges and takes stock of reforms enacted over the past year

-- in both advanced and emerging economies -- on policy priorities identified in the

previous issue of Going for Growth.

Country highlights

The convergence process toward the most advanced OECD countries is slowing down,

due both to a decline in potential growth and cyclical factors. The still large gap remains

mainly driven by productivity, as the employment rate remains above the OECD average.

Income inequality is higher than in most OECD member countries, and has increased

further in the recent years.

Improving the mix of public expenditure and tax revenues is important for inclusive

growth. More spending on education and infrastructure could lift productivity and help

reduce the sharp income inequality. Shifting the tax burden from businesses to

immovable property, making personal income taxes progressive and improving tax

collection would also underpin inclusiveness. Strengthening intergovernmental

frameworks and fiscal autonomy of sub-national governments could make public

spending more effective. Innovation policies are critical to ensure a transition towards

domestically-driven and resource-independent growth. Strengthening the links between

the many research institutes at both federal and regional level and the corporate sector

could spur innovation. In particular, improving the framework for SMEs would boost

entrepreneurship and productivity.

FDI regulatory restrictiveness Index

2016

Source: OECD, FDI regulatory restrictiveness Index Database

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ESP DEU ARG GBR FRA ITA JPN ZAF TUR USA BRA KOR AUS CAN RUS MEX IND IDN CHN

ECONOMIC POLICY REFORMS: GOING FOR GROWTH 2018 │ 8

Going for Growth 2017 recommendations include:

Reduce state control over economic activity and other barriers to

competition by continuing to reduce administrative barriers and widening federal

initiatives to regional and local levels. Accelerate privatisation of state-owned

banks and enterprises (SOEs). Further improve governance of SOEs and foster a

level playing-field between public and private companies, including in the area of

taxation. Extend regulatory impact assessments to legislative draft considered by

the Duma.

Lower barriers to foreign direct investment by removing administrative entry

barriers and refraining from introducing new ones. Shorten the list of strategic

sectors with prior approval required for foreign investment and streamline the

approval process.

Raise the effectiveness of innovation policy by continuing broad-based support

for innovation and the adoption of new technologies. Shift more research from the

RAS to universities, increasing the share of competitive grant funding and

streamlining state-owned branch research institutes. Strengthen the links between

universities and the private sector, especially SMEs, and foster an environment

that is conducive for start-ups. Support private-sector innovation activities

through universally applied tax credits.

Raise the quality of public administration by continuing the anti-corruption

campaign with stronger focus on transparency and accountability of the public

sector. Reduce potential for corruption by minimising the need and the scope for

subjective decision-making by officials. Improve legal protection of whistle

blowers and do not restrict the scope for media and NGOs to publicise violation

of the law. Strengthen judicial independence through greater transparency in

appointment and promotion processes, better pay and rotation of judges.

Improve the quality of the public finances by increasing the share of spending

on education and infrastructure and reduce that on defence. Shift the tax burden

from business to immovable property and consider making income taxation more

progressive. Improve tax collection. Strengthen intergovernmental frameworks

and fiscal autonomy of sub-national governments. Scale up spending on ALMPs,

in particular on training and job search support.

Recent policy actions in these areas include:

The quality of trade-supporting infrastructure has been improved with the

extension of the Saint-Petersburg harbour.